Eastman kodak is a surfer BUY
damaged beyond repair by the migration to digital photography from traditional film. Founded in 1880, the company lead the photographic supply revolution through the next century. Despite a valiant effort to offer a full suite of digital products, Eastman Kodak, as a consumer brand, never recovered the dominant position it possessed prior to the digital era. The company is now perceived as âa has beenâ and âalso ranâ in many consumer minds.
However, this view may be changing as Eastman Kodakâs stable of patents are being brought out of the closet and defended against a myriad of copycats. Kodak has more than 1,000 patents and earned about $630 million from licensing in 2010.
Kodak successfully pursued Korean companies, LG and Samsung in 2009 for patent violations. The companies were forced to pay Kodak about $950 million in licensing fees to continue to use Kodakâs patented technology. The stock received a solid boost from this ruling, almost tripling in value over of the next year prior to starting another downward slide.
Presently, a similar patent suit against Apple (Nasdaq: AAPL) and Research in Motion (Nasdaq: RIMM) has sent Kodakâs stock soaring. Kodak has asked the judge to bar all importation of Appleâs and RIMMâs mobile phones and digital cameras due to patent violations. A trade panel agreed to review this claim last week triggering the aggressive buying. Kodakâs CEO Antonio Perez firmly believes that his company could earn $1 billion from a favorable ruling.
Judging from Kodakâs past successes in similar matters, it appears that there is hope for another win for the struggling giant. The question is, should investors bet on it? There is money to be made here, just stay nimble and donât get caught holding the bag.
